Isleworth Healthcare to Combine With Cytovia Therapeutics for $602M Valuation

SPAC Isleworth Healthcare Acquisition Corp. (Nasdaq: ISLE) and biopharmaceutical company Cytovia Holdings Inc. have entered into a business combination deal whereby Isleworth will be renamed Cytovia Therapeutics, Inc. (the combined company).

The deal, announced April 26, values the combined company “at a pro forma equity of $602 million, assuming $10 per share, no Isleworth stockholder redemptions and no additional financing obtained prior to the closing of the transaction.” Subsequently, the combined company would have up to $227 million in gross proceeds.

According to the filings, Cytovia is a biopharma company “empowering natural killer (NK) cells to fight cancer through stem cell engineering and multispecific antibodies.” Reportedly, Cytovia is “the first immune-oncology company with the capabilities to combine gene edited iPSC-derived NK Cell and Flex-NK cell-engager antibody platforms to develop the next generation of immunotherapies for both hematological and solid tumors.”

As stated in the filings, the combined company will continue the operations of Cytovia and continue to develop and manufacture “complementary NK cell and NK engager antibody platforms.” Furthermore, these are “being used to develop treatments for patients with Hepatocellular carcinoma (HCC) and solid tumors.” It is anticipated that by the end of 2022 clinical studies will be initiated.

“We expect this transaction to accelerate the execution of Cytovia’s vision to advance NK therapeutics towards a cure for cancer,” Dr. Teper, co-founder, chairman and CEO of Cytovia, said in a press release. “We are encouraged by our preclinical data recently presented at AACR, which supports advancing development of our iPSC-derived NK cells (iNK) and Flex-NK cell engagers for the treatment of Hepatocellular Carcinoma.”

“Isleworth evaluated multiple life science companies and was most impressed by the talent and technology assembled by Cytovia,” Bob Whitehead, Isleworths CEO, said. “We believe Cytovia is one of the most advanced, innovative cell therapy companies involved with the development of new cancer treatments. Cell therapies in oncology have already brought hope to millions. Cytovias approaches could conceivably make similar approaches more conveniently off-the-shelf and affordable.

Pursuant to the deal, proceeds from the PIPE fund, money in Isleworth’s trust account and proceeds from other financings in a combined amount of up to $100 million will provide Cytovia with capital for up to 2 years.

Existing Cytovia equity holders will roll their entire equity holdings into the combined company and are expected to hold about half of the issued and outstanding equity of the combined company immediately after closing.

Accordingly, the combined company’s common stock and warrants are will be listed on NASDAQ under the ticker symbols INKC and INKCW, respectively. The combined company will be led by the current co-founder, chairman and CEO of Cytovia, Dr. Daniel Teper. The board of directors of the combined company will consist of two people chosen by Isleworth and five people chosen by Cytovia.

The transaction is expected to close in Q3 2022, subject to customary closing conditions as well as Isleworth and Cytovia shareholder approval.

Cytovia is represented by Cooley LLP and its financial advisor, placement agent and capital markets advisor is Truist Securities; Truist’s legal advisor for its placement agent role is Goodwin Procter. Additionally, BTIG LLC is acting as capital markets advisor to Cytovia. Isleworth is represented by ArentFox Schiff LLP and its capital markets advisor and placement agent is I-Bankers Securities Inc.

The announcement did not have a major impact on Isleworth’s stock prices. Prior to the announcement, Isleworth’s stock was valued at $9.90 on April 25. When it was announced on April 26, its stock was valued at $9.92 and a few days later on May 3, stock closed at $9.92.